Athabasca Oil Corp T.ATH

is ATH on the hook if KXL is cancelled?

[Nic777]

what do you guys make of this?

Athabasca Oil Corp. provided TC Energy with US$48 million in financial assurances in the third quarter of 2019 when it committed to ship 7,200 bpd on the existing Keystone pipeline system, chief financial officer Matt Taylor said in an email.

“In the event the Keystone XL pipeline is cancelled before March 31, 2021 TC Energy would keep this conditional payment. When the project is officially sanctioned TC Energy is required to return the financial assurances back to Athabasca,” Taylor said.

Athabasca disclosed the conditional payment in its first quarter financial results this spring and indicated it was “evaluating various options under the agreements in order to manage risk and capture value for the company.”

Oil producers on hook for millions in contingency payments to TC Energy if Keystone XL cancelled | Financial Post

[Maxmoe]

Keystone has been operating for 10 years. The issue is the latest expansion/extension of the existing pipeline. True , Matt Taylor may not be the sharpest cfo in Calgary , but there are not enough clear facts in your cut and paste to determine who is on the hook for what. In fact any locked up capacity on the existing keystone will be worth even more if the extension/expansion is halted. Good luck

[fellowship]

Have exactly same opinion as Max.  ATH should require a refund !  The deadline for the Keystone XL extension consideration was to the end of March. 

[Maxmoe]

I haven't read the documents and I doubt I could get a straight answer from Matt but I expect they are entitled to a full refund and/or space on the existing keystone pipeline. Remember this is an expansion/extension  not a brand new pipeline. Either solution works for me. 

[fellowship]

https://ibb.co/d41Hp6d

[Eigen337]

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